The document discusses foreign direct investment (FDI) in India. It defines FDI and outlines some key factors that influence the location of FDI projects, such as market size, government incentives, costs, and political stability. Some key points about FDI in India include: 1) The volume of foreign trade in India has increased dramatically from 1950-2004. 2) The composition of exports has shifted from commodities like tea and jute to machinery, vehicles, garments and gems. 3) The direction of exports has changed, with developing Asian countries now the top destination instead of OECD nations.

1. A PRESENTATION
ON
FOREIGN DIRECT INVESTMENT
BY
SWARNIMA TIWARI

2. DEFINITIONS OF FDI
 Foreign trade refers to the exchange of goods and service with
other countries
 According to IMF definition FDI includes external commercial
borrowing, reinvested earnings and subordinate debts.
 According to the World Trade Organization (WTO) (1996),
foreign direct investment mean, “when an investor based in one
country (the home country) acquires an asset in a country (the host
country) with an intend to manage the assets”.

3. FACTORS INFLUENCING LOCATION OF FDI
1. Knowledge and experience of foreign market .
2. Size and growth of the foreign market .
3. Government emphasis on FDI and financial
incentives .
4. Economic Policy Inflation, tax rates and tax
structures of the home country.
5. Transportation, material and labor cost .
6. Transportation, material and labor cost
7. Technology.
8. Political stability

4. FDI IN INDIA
FDI in India can be studied under the three
headings as:
 Volume of Foreign Trade
 Composition of Foreign Trade
 Direction of Foreign Trade

5. TABLE 1
VOLUME OF FOREIGN TRADE
Year Imports Exports Total
(RS. CRORE)
1950-51
1960-61
1970-71
1980-81
1990-91
1995-96
2000-01
2001-02
2002-03
2003-04
608
1122
1634
12549
43198
122678
230878
245200
297206
359107
606
642
1535
67111
32553
106353
203571
209018
255137
293367
1214
1764
3169
19260
75751
229031
434444
454218
552343
652475

6. COMPOSITION OF FOREIGN TRADE
(I) EXPORTS (II) IMPORTS OF THE COUNTRY.
Commodity 1950-51 1990-91 2000-01 2003-04
Tea
Jute manufacturing
Cotton yard, fabrics
Oil cakes
Readymade garments
Iron ore
Machinery & Transport
Coffee
Gems and Jewellary
Chemicals
Mineral fuels
80
114
138
17
-
18
0.4
10
-
-
-
1070
298
1179
609
2236
1049
2158
252
5247
2111
948
1976
932
16030
2045
25478
2634
31870
1185
33734
22851
8822
1637
1113
15600
3348
28634
5173
56615
236
48586
34915
17159

7. CHANGE IN COMPOSITION OF IMPORTS
INDIA’S PRINCIPAL EXPORTS
Commodity 1950-51 1990-91 2000-01 2003-04
Iron & steel
Machinery
Transport Equipment
Fertilizers & manufacture
Paper
Petroleum & oil
Non-ferrous metals
Pearls & others
Capital goods
20
91
41
22
87
-
47
-
356
2113
4240
1679
1766
456
10876
1102
3738
10466
3569
16915
4353
3034
2005
71497
1786
22101
25281
6951
23911
2916
3022
94520
35866
32757
47741

8. TABLE 4 DIRECTION OF TABLE
Expor
t
Impor
t
Export Import Export Impor
t
1980-81 1990-91 2003-04
OCED
OPEC
Eastern Europe
Developing Countries
Asia
Africa
Latin America &
others
46.6
12.4
22.1
18.9
13.1
5.1
0.7
45.8
27.8
11.7
15.7
11.7
1.6
2.6
53.5
5.6
17.9
16.8
14.3
2.1
0.4
54.0
16.3
7.8
18.4
14.0
2.2
2.3
46.4
15.0
1.8
32.6
27.6
3.3
1.7
37.8
7.2
1.6
20.1
17.2
1.3
1.5

9. CONCLUSION:

10. THANK
YOU